Butanes may refer to either of two structural isomers, n-butane (normal butane) or isobutene or to a mixture of these two isomers. Normal butane is primarily used in liquefied petroleum gas (LPG). About two third of the butane produced globally is used in LPG. Butane is commonly referred to as LPG when it is mixed with propane in a certain proportion. LPG is mainly used for residential and commercial purposes as a cooking and heating fuel.
One of the sources from where butanes are extracted is gas processing plants which are located close to crude oil or natural gas reservoirs. Basically, butane is produced as a byproduct of crude oil production and refining. Some amount of butane is also recovered from natural gas. Leaving aside the butane produced from crude oil refining, butane produced from crude oil and natural gas production accounts for approximately 55% of the total butane produced globally. But this percentage varies from region to region; for example in North America the butane produced from reservoirs accounts for 80% of the total butane production whereas in Asia Pacific it accounts for only 10% of the total production.
One of the major factors driving the global market for butanes includes the rapid exploration and development of shale gas mainly in the U.S. and China. In order to reduce dependability on natural resources such as crude oil and natural gas, owing to their limited availability and the volatility associated with their prices, the world is shifting focus towards developing unconventional resources such as shale gas. Large numbers of untapped shale gas reservoirs are still to be explored around the world. Transparency Market Research (http://www.transparencymarketresearch.com/), a leading U.S.-based Market Research firm, analyses the market for butanes and predicts a compounded annual growth rate of 2.46% for the period 2012 to 2018.
The total amount of technically recoverable shale gas was 7,299 tcf globally in 2012. China has the largest shale gas resources available with 1,115 tcf in 2012. China is followed by Argentina, Algeria and North American countries including U.S., Canada and Mexico. The top ten countries accounted for approximately 78% of the total recoverable shale gas reservoirs in 2012.
The growing exploration and production of shale gas is expected to ensure constant supply of butanes to the end use industries including LPG manufacturers, petrochemical, refineries and auto fuel.